Influence of Perceived Mobile Financial Services Risk and Usefulness on Digital Financial Inclusion of Low–Income Individuals in Tanzania
Keywords:
Digital financial inclusion; mobile financial services; perceived risks; perceived usefulness.Abstract
Digital Financial Inclusion (DFI) plays a critical role in empowering underserved communities by
providing access to essential financial services, thereby fostering their social and economic development.
This study was designed to address two themes: The extent to which Perceived Risks (PR) and Perceived
Usefulness (PU) influence DFI among low-income individuals. Secondly, how PR moderates the relationship
between PU and DFI. Drawing data from 283 microfinance banks clients in Arusha and Dar es Salaam,
Tanzania, the study employed the Partial Least Squares Structural Equation Modelling (PLS-SEM) for
statistical analysis. Descriptive findings highlighted moderate PR concerns, especially regarding transaction
security and errors while PU was rated highly for its perceived benefits in saving time, reducing costs and
improving financial management. Inferential analysis revealed that PU had a substantial and statistically
significant positive effect on DFI whereas PR exhibited no direct influence nor moderating role in the PU–DFI
relationship. These results suggest that enhancing the PU of Mobile Financial Services (MFS) can significantly
drive DFI even in the presence of moderate risk concerns. The study underscores the need for targeted
strategies to promote MFS usability and security, particularly for low-income users in developing economies.
Future research should explore evolving risk dynamics and technological innovations to proactively monitor
and address emerging risks in DFI.
